Corporate culture has become a topic of national conversation. Organisational balance sheets and reputations are being severely impacted and regulatory scrutiny is intensifying. At the same time, organisations are investing significant time and money surveying, guiding and training staff on values, ethics and conduct. Despite this heightened focus, staff members continue to act contrary to clearly espoused standards of behaviour. At Blackhall & Pearl, we know why this discrepancy occurs and how to resolve it. Our CONDUCT-iQ model assesses, shapes, benchmarks, predicts and monitors culture and individual conduct. From the boardroom to the storeroom.
Whilst the tone of leadership, corporate values and ethics, risk appetite and the type of incentives (all key factors in our model) are important, culture is ultimately a local construct. It is driven by social factors, which means people are mainly influenced by the colleagues they interact with every day. These local influencers can be people they like and trust or fear due to pressure and bullying. This is known as Social Learning, and it is how knowledge becomes habit and how behaviour becomes ingrained. Social Learning influencers are ‘Culture Carriers’. They exert an immense level of positive or negative impact on workplace culture and conduct at the local business unit level. However, they are not always recognisable.
Culture Carriers are not necessarily senior management or internal experts. They are work colleagues that function through informal networks. These invisible networks account for up to 70% of an organisation’s total knowledge and behaviour flow. Identifying these invisible networks and the Culture Carriers that are positively or negatively influencing their peers enables the organisation to significantly shape and ingrain desirable conduct at the individual level. The identification and engagement of Culture Carriers is achieved through Social Network Analysis (SNA).
SNA reveals the invisible social networks that have the most influence on culture and conduct at the local business unit level.
The formal organisational structure reflects authority, accountability, budgeting, policies, reporting, etc.
The social network structure is how everyday work is actually performed. This has the main influence on local behaviour.
Our CONDUCT-iQ model aligns all the key drivers of culture, with SNA at the core of the process. This enables us to identify the positive and negative Culture Carriers and shape and ingrain individual behaviour. We do this through a combination of Human and Machine based SNA.
•Human SNA: This involves a concise online survey that identifies the positive and negative Culture Carriers who influence conduct at the local business unit level. This enables the incentivisation of positive Culture Carriers to change the behaviour of the peers they directly influence and the counselling or exiting of negative Culture Carriers to prevent the spread of dysfunctional culture.
•Machine SNA: This reinforces and augments Human SNA and involves the analysis of internal data (such as email archives and meeting logs) and external data (such as Tweets and Blogs). The algorithmic analysis of this data enables the accurate prediction of conduct and is based on an AI platform that has been developed in conjunction with leading global academics and research institutions.
The Blackhall & Pearl CONDUCT-iQ model aligns and ingrains behaviour at the local business unit level.
Direct & Align:
The model directs and aligns expected behaviour through an assessment of:
•Corporate values and ethics
•Governance and leadership
•Risk appetite framework
•Incentives and development
•Escalation and consequence
•Enterprise risk assessment
Change & Ingrain:
The model shapes and ingrains behaviour at the local business unit level through a combination of Human based SNA and Machine based SNA
The unique combination of Human and Machine SNA enables us to provide a comprehensive suite of predictive Culture Indicators to proactively monitor and report on enterprise culture. A sample of the culture environment our indicators monitor includes:
•The type of culture and individual conduct evolving throughout the organisation.
•The likelihood and level of adhesion of behavioural change amongst individuals.
•The level of effective management by teams and individuals.
•The level of challenging and issue escalation empowerment.
•The level of employee motivation and engagement on key issues.
•The level of internal stakeholder satisfaction with key issues.
•The likelihood of individual employee misconduct.
Risk culture does not exist in a vacuum. It is still part of the wider organisational culture and the way in which that general culture influences the management of risk and the behaviour of individuals in relation to risk. The benefits of our CONDUCT-iQ model include:
•Ability to assess, align, shape, benchmark, predict and monitor individual behaviour.
•Up to 8 times faster level of cultural change compared to usual practices (including typical incentives).
•The Board has a much clearer view of the risk culture and conduct of the organisation.
•The C-Suite has a predictive warning system of risk culture practices throughout the organisation.
•Management has a synchronous dashboard for risk culture performance monitoring.
•Business units and teams have a risk culture benchmarking improvement framework.
•Opportunity for a significant reduction in the cost and complexity in managing risk culture.
•Strengthening of the organisation’s unique competitive advantage through its own culture.
•Minimised risk of fines, class actions, regulatory interventions and reputational damage.
In addition to the above risk culture related benefits, our CONDUCT-iQ model is also highly effective in diagnosing and improving employee innovation, productivity and engagement.
Our CONDUCT-iQ model dynamically identifies and assesses regulatory compliance throughout the whole organisation. This enables our clients to streamline AML checks, transform customer due diligence, enhance anti-fraud measures and improve suspicious activity reporting.